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Archive for December, 2009

Hey everyone! I hope you all have a very happy, healthy, successful, and safe 2010! Have fun tonight and stay safe. I’m for sure going to one of my favorite Thai restaurants, the Silver Spoon, and of course a bit of champagne…all night!

Also, the real estate market always starts to pick up after the new year because the holidays are winding down and everyone’s always more optimistic and ready to get out there. So when you’re ready to buy, sell, or even find an apartment in Chicago, don’t hesitate to contact me or your favorite @properties agent. I would love to help out! jeffstewart@atproperties.com

Big court victory for O’Hare expansion

In a major victory for the city of Chicago’s O’Hare Airport expansion plans, a DuPage County judge ruled Friday that the city can proceed with condemnation proceedings to acquire St. Johannes Cemetery, which stands in the way of the completion of a new runway.

St. John’s United Church of Christ in Bensenville — which owns the 1,100-grave burial ground — had fought the acquisition, arguing it would cause great grief for families of those buried there. Joseph Karaganis, an attorney for the church, said he plans to challenge the court ruling.

The cemetery issue is the last major obstacle to the city’s expansion of O’Hare.

Last month, the village of Bensenville settled with the city, getting $16 million and agreeing to allow the demolition of over 500 abandoned homes and businesses….

Chicago Spire twists in wind as union funds pass on bailout loan

Recent reports that Spire developer Garrett Kelleher and union officials are discussing a possible loan rekindled hope that work would resume on the twisting tower, which at 150 stories would be North America’s tallest building.

But two union funds identified by a local labor leader and a Spire spokeswoman as having expressed interest, the AFL-CIO Building Investment Trust and the union-backed life insurer ULLICO Inc., are taking a pass, according to top executives there. Representatives of two others, the AFL-CIO Housing Investment Trust and the Multi-Employer Property Trust, say the Spire isn’t a suitable investment for them.

“It’s not something we’re able to do,” says Edward Smith, president of ULLICO. “Unfortunately, these are just very difficult markets.”

Another union fund or group of funds still could step forward with a loan for the project. Mr. Kelleher also could secure funding from other sources. But the lack of interest from the four big funds narrows the Irish developer’s options as he seeks a financial lifeline for the Spire.

They’re among the largest funds of their kind, controlling about $13 billion in union pension funds and other assets. They also have a history of commercial real estate investing here and around the country, and an interest in backing projects that create jobs for union workers.

Worries about the prospects of the Spire in a moribund real estate market appear to have trumped their desire to help put union members back to work. The funds are no more eager than other real estate investors to risk money on a highly speculative project in the worst downturn in recent memory.

Mr. Kelleher seeks about $170 million in short-term financing to pay off existing debt and move the project forward. It would be a particularly risky loan because the most likely source of funds for repayment would be a construction loan for the $1-billion-plus project. Construction lenders typically advance funds only after a developer sells 50% of the units in a condominium project. After two years of worldwide marketing efforts, Mr. Kelleher has sold about 30% of the Spire’s 1,194 units.

In essence, Mr. Kelleher is asking the union funds to bet on his ability to sell condos in a stagnant downtown housing market, where mortgage and construction financing is hard to come by.

Michael Arnold, head of investor relations for the AFL-CIO Building Investment Trust, says his fund can’t take that risk. “We would obviously like to be helpful,” he says. “We understand the interest, but we’re not any different than other real estate lenders today.”

“This just can’t be looked at in a straight investment-type view. You’ve got to add into the equation this would be 7.5 million man-hours for my members,” Mr. Villanova says. “I don’t think we’ve ever seen times as bad as they are now.”

Mr. Villanova organized a meeting in the spring between Mr. Kelleher’s company, Shelbourne Development Group Inc., and representatives of the 24 local unions that comprise his group. He says some local union officials met with Shelbourne again, but he can’t recall which ones.

Hi there everyone! For all of you celebrating Christmas, I wanted to wish you a very Merry Christmas and Happy Holidays to everyone! Have a great time and hopefully you can take this time to relax a bit. That’s all you’re getting from me today!

Proposed Lincoln Park condo project scaled down

(Crain’s) — Developers of a proposed luxury condominium complex overlooking Lincoln Park are slashing the number of units by nearly a third in a bid to break through the locked-up market for large construction loans.

Ricker-Murphy Development LLC told buyers last week that the number of units would be cut by a nearly a third, to 198 from the 292 previously proposed, in Lincoln Park 2520, a three-building complex proposed for the site of the demolished Columbus Hospital, 2520 N. Lakeview Ave.

As a result, developers plan to lop off eight stories from the tallest building, reducing the height to 33 stories from the 41 stories previously proposed.

“Our opportunity to reduce the scale we believe will actually make us more attractive for not only construction financing, but also more attractive for the buyers” who want a smaller project, says John Murphy, a co-principal in Ricker-Murphy, whose joint-venture partner is the General Electric Co. pension fund.

Although the building will be shorter, the changes would not affect the design by Chicago architect Lucien Lagrange.

But even at a reduced size, the project would likely require a construction loan of more than $200 million to complete. As a result, the venture plans to start work without a loan on the foundation, which alone could take 12 months to finish. A smaller building still could be completed by late 2011, as required by the current contracts with homebuyers.

The shift in strategy comes as Ricker-Murphy faces an Aug. 15 maturity date on a $28.75-million loan on the site held by Bank of America, property records show. Mr. Murphy says talks are already under way for an extension of the loan.

B of A executives could not immediately be reached for comment, a spokeswoman says.

Ricker-Murphy and the GE pension fund are taking an aggressive approach to challenges facing many residential developers, who have instead opted to put their projects on hold.

“The cheapest thing to do is to sit and wait it out,” says developer Harry Huzenis, a principal in Chicago-based Jameson Development LLC. “The type of buyer they have will be there when the market is better.”

With asking prices of $885 a square foot, the project has not been immune from the broad downturn in the condo market, despite its premium location. Sales have stalled at about 50% of the units, a level that was once more than enough to obtain a construction loan. But lenders have become fearful of new condo projects because of deep concerns about weak demand and the glut of units already being built.

By reducing the number of units, the percentage of condos under contract would increase to 74%, from about 50%, assuming the number of buyers does not change, Mr. Murphy says. Reducing the number of units eliminates 29 condos that are already under contract, giving those buyers the chance to walk away and possibly washing out any advantage to the developers….

Chicago-area home sales jump 72% in November

Below is a monthly year-over-year comparison of home sales (single-family and condo) in the nine-county Chicago area.

Month

2009

2008

Change

January

2,965

3,927

-24.5%

February

3,082

4,326

-28.8%

March

4,260

5,759

-26.0%

April

4,747

6,094

-22.1%

May

5,634

6,927

-18.7%

June

7,140

7,806

-8.5%

July

7,427

7,408

0.3%

August

7,009

6,917

1.3%

September

6,862

6,477

5.9%

October

7,286

5,467

33.3%

November

6,826

3,978

71.6%

Source: Illinois Assn. of Realtors

The group cited pent-up demand from buyers, low interest rates and the federal tax credit for first-time home buyers as the reason for the fifth straight monthly year-over-year improvement for the Chicago metro area.

Home sales in November and October of 2008 were extremely low as the worst of the nation’s financial crisis was hitting.

“November’s sales surge reflects the rush to beat the tax-credit deadline,” Mike Onorato, the association’s president, said in a press release. The tax-credit deadline was extended from November through April 30, 2010.

Median prices in the Chicago area, however, continued to fall.

In November, the region’s median price – where half the homes sold for more and half sold for less – was $189,000, down 9.1% from $207,995 in November 2008.

Total sales in the region, including single-family homes and condominiums, were 6,826 compared with 3,978 in November 2008.

In the city of Chicago, November sales were up 69.9% to 1,859 compared with 1,094 homes sold in November 2008. The median price in the city was $215,000, down 3.4% from November 2008.

Statewide, home sales totaled 10,361 in November, up 64% from the same month last year. The statewide median price was $155,000, down 4.3% from November 2008.

The Adler School will occupy two full levels at 1 N. Dearborn and is to move in January 2011 from its home of almost 20 years at 65 E. Wacker Place, a skinny building where the school is spread over seven floors.

At 1 N. Dearborn, a 17-story tower built in 1905 that includes Sears’ State Street department store, the school has leased 100,796 square feet that includes a designated first-level entrance and lobby. The school also will have a rooftop deck and has expansion options for the currently vacant 17th floor.

Adler President Raymond Crossman says the move will be “transformational” for the little-known school, which offers graduate-level courses in psychology and group counseling as well as social justice programs inspired by Alfred Adler, an Austrian psychiatrist who died in 1937 and is credited with coining the term “inferiority complex.”

Mr. Crossman says the move will accommodate the school’s recent growth, to 712 students this fall from 366 five years ago, and also help raise Adler’s profile.

“Right now, you can walk by the school and not really notice it. That won’t be possible at the new location,” says Mr. Crossman, adding that the new classroom space also will be a big improvement for students and staff. “It’s going to be hard to walk into that space and think inside the box. The space is going to be so innovative.”

While the recession has ravaged the office leasing market and burst the construction boom downtown, universities have been a bright spot for the Loop. Roosevelt University recently sold bonds to finance a new 32-story tower, which will be the second-tallest college building in the U.S. when completed in 2011, while Robert Morris University is also expanding….

IBT Group Announces Partnership with Blackrock to Build Project in Chicago’s West Loop

August 7, 2007

IBT Group LLC, a real estate and asset management firm and advisory client of BlackRock Inc., one of the world’s largest investment management firms, have announced a partnership that will provide capital for a new mixed-use development in Chicago’s West Loop.

“Our partnership with BlackRock represents a significant step forward in our growth,” said IBT Group President Gary Pachucki, who founded the company in 1999. “It not only secures capital for West Loop Promenade, but also provides access to Wall Street, and the capital that will allow us to pursue larger, more complex transactions.”

“We are pleased to become a capital partner to IBT Group and its West Loop Promenade development, which has already secured a lease with Robert Redford’s Sundance Cinemas,” said Erik Grabowski, BlackRock Vice President. “We view the West Loop as one of the fastest-growing areas of Chicago and are excited about the opportunity to bring a high quality retail/entertainment project to the neighborhood.”

West Loop Promenade is a $240 million retail and residential project being developed by IBT Group on Chicago’s Near West Side. Scheduled for a spring 2009 opening, it will include 285,000 square feet of retail space on three levels, including the eight-screen Sundance Cinemas theaters.

15-Year Loans Gain Fans

Home buyers and home owners who are refinancing are increasingly enthusiastic about 15-year, fixed-rate mortgages.

Originations of 15-year mortgages at Wells Fargo & Co. are up 55 percent through November compared to a year ago. At J.P. Morgan Chase & Co., 20 percent of refinances are 15-year loans, up 10 percent in 2008.

One reason is that rates on 15-year fixed-rate conforming mortgages averaged 4.46 percent in early December, according to HSH Associates in Pompton Plains, N.J….

When I got back home from being on vacation, I got the nice surprise that ChicagoismynewBlog! had surpassed the 40,000 hits mark…awesome! Keep on visiting and keep telling your friends and colleagues about ChicagoismynewBlog!